Best way for savings to track the property boom

alberty

I have a deposit intended for a property but I was waiting for something I liked, but waiting has shrunk my purchase power by 25% in a year and I'm confident there is still 'upward momentum' in London. Is there a savings instrument that gives me ready access to my money (max 30 days notice) linked to the london property HPI? eg mortgage debt bonds? -IDK I'm not an investor! any investor input would be appreciated.

Generali

alberty wrote: »

I have a deposit intended for a property but I was waiting for something I liked, but waiting has shrunk my purchase power by 25% in a year and I'm confident there is still 'upward momentum' in London. Is there a savings instrument that gives me ready access to my money (max 30 days notice) linked to the london property HPI? eg mortgage debt bonds? -IDK I'm not an investor! any investor input would be appreciated.

There is, or at least used to be, a future linked to the HBOS HPI. I'm not sure whether that still exists or not and what the costs of holding are.
The last time I looked it was pretty illiquid so quite expensive. That might have changed as interest rates have fallen. A future is a financial product that allows you to take a view on a future price. They are quite technical products so take care with buying futures!!!


An alternative would be to invest in something called a REIT. This is an investment fund which invests in property, normally commercial property. It usually has some internal tax advantages too. In investing in something like that you'd have to hope that commercial property is a reasonable proxy for residential property.

The last alternative is to buy a BTL. As that should rise and fall with the broader market.

gfplux

Be very careful. If you are not a sophisticated investor some of these funds can be scary.
They can grow you money rapidly but also lose it just as quickly.
Only your attitude to greed will be your guide.

PasturesNew

I was waiting for something I liked... then I realised that I was fast not being able to even afford the ones I didn't like.

Sometimes you just have to buy and be done with it.... I just did.

calicocat

I looked around for nearly a year, it took me that long to focus on exactly what I wanted or where I would compromise. Once that decision was made, I bought as quick as possible, and very pleased I did as the same was going for around 15-20K or more in under 6 months, and they are now even harder to get and are going within a week at the moment.

Snakey

I'm glad I made the leap and I wish, with hindsight, that I'd made it a lot sooner. It took me a while to accept that I was going to have to compromise like mad if I wanted to buy at all. I completely re-did my wish list to leave only the absolute essentials and started again. Had I not done this, I would never have bought (short of a massive crash), because nothing in my price range was anything like my dream home and it was getting more expensive all the time.

The best way to track the property market in an area is to buy a property in that area. It puts you in a less good position than somebody who doesn't have a property to sell, and you're always going to lose your stamp duty and legals, but on the upside if you don't find your perfect place for another five or eight years at least you've had a place to call home in the meantime.

System

Just as shared ownership is becoming popular as a way for several friends etc to buy a property to live in, one might have thought there should exist some kind of shared equity investment market. Capital could be put up by investors, not looking to actually live in a property, but to do exactly what you are looking for, while widening the scope for the actual residential owner to afford something otherwise beyond his means.

IronWolf

Spreadbetters offer some bets on house price increases. Due to the leverage you could probably keep most of your money in a high interest account at the same time.

http://www.ig.com/uk/house-prices-bet-details

alberty

Cheers really good info. For the next 3 months my hopes are in rumours of a fall in London prices -if sellers are scared enough by such headlines to increase the supply. Even 2% down would be a blessing, so many properties I wanted have been just out of reach :mad: